ANNUITY/LIFE
Annuity Talk
How Do You Get Guaranteed Retirement Income?
Annuities are often overlooked as retirement planning tools, but they offer several unique benefits that can be incredibly valuable to retirees. For one, annuities are the only retirement plan in the United States that offers guaranteed retirement income payments. So, no matter how long you live, you will never outlive your retirement savings. In addition, annuities offer tax-deferred growth, which means you can let your money grow without paying taxes on the gains.
What is a guaranteed lifetime withdrawal benefit?
A guaranteed lifetime withdrawal benefit (GLWB) is a feature of some retirement annuities (fixed index and variable annuities) that provides retirees with a stream of guaranteed income payments that cannot be outlived. In addition, some guaranteed lifetime withdrawal benefit plans offer an annual increase that keeps up with inflation, which can help to offset the rising cost of living.
The Most Secure Retirement Plan - A No-Fee Annuity
Annuities offer several benefits that make them an attractive option for many people.
- First, annuities offer a guaranteed income stream for life. You will not have to worry about outliving your retirement assets.
- Second, annuities are tax-deferred, so you will not have to pay ordinary income tax on your investment until you receive payments.
- Finally, annuities offer death benefits and spousal benefits that can help to provide financial security for your loved ones.
For these reasons, no-fee annuities are most often considered the most secure retirement plan.
The Safest Place to Put Your Retirement Money
There are many different options for retirement planning, and it can be tough to know which is the best for you.
- However, if you're looking for a safe investment portfolio that will provide a guaranteed income stream, an annuity with a lifetime income rider is the way to go. With this type of annuity contract, your payments are guaranteed no matter how long you live, so you can rest assured that your retirement savings will never run out.
- Similarly, a fixed annuity is the way to go if you're looking for a fixed interest rate on your retirement savings. With this type of annuity, your interest is guaranteed for a set period, so you know exactly how much money you'll earn each year.
- Finally, if you're looking for an investment that has the potential to grow over time, a fixed index annuity is the right choice for you. With this type of annuity, your savings are linked to popular indexes such as the S&P 500 or the Dow Jones Industrial Average so that you can benefit from their performance. Index annuities do not lose money to market volatility and should not be confused with a variable annuity (which can lose money).
Whichever type of annuity you choose, you can rest assured that your retirement savings are safe.
Guaranteed Investments - The List
While there's no such thing as a 100% guaranteed investment, there are options that come close. You work hard for your money. You want to ensure that it will be there when you need it – whether for retirement, a rainy-day fund, or something else. So, are there any guaranteed investments? The answer is YES.
- Fixed and fixed index annuities offer a fixed rate of return, so you know exactly how much money you'll have at the end of the term, but your principal is protected.
- CDs are also a relatively safe investment, although they may not offer the same rate of return as other options.
- Money Market accounts are another option – although the interest rate may be lower than other options, your money is still FDIC-insured.
What are the Greatest Reasons To Rollover A 401(K) To An Annuity?
Annuities offer several advantages, whether held inside or outside a 401(k).
Annuities are flexible investment products that can help you achieve your long-term financial goals and provide a source of retirement income. There needs to be more than tax deferral to use an annuity in a tax-qualified plan. But income options, death benefit protection, investment selections and services, and flexibility are benefits an annuity can bring to any 401(k).
Growth Potential
You can earn additional interest based on the upward movement of an external market index in both bull and bear markets.
Tax-Deferral
There are no tax consequences as long as you follow IRS guidelines. You won’t pay any taxes on gains from the annuity until you withdraw your money.
Contribution Match
Like a 401(k) match from your employer, some annuities can offer a premium bonus (up to 20%) on rollovers and additional deposits.
Protection from market downturns
You will not lose money due to market downturns in a fixed annuity or fixed index annuity. If the markets have a down year, you earn zero interest. In exchange for this protection, you are limited on the participation or cap of increase you can get each year, unlike an individual stock through a mutual fund.
A variable annuity will provide unlimited upside potential without protection from volatile market conditions. However, adding a Guaranteed Lifetime Withdrawal Benefit can protect the annuitant from running out of money due to a stock market crash.
Guaranteed retirement income for life
You can choose to annuitize your annuity to receive annuity payments over a period of time or for life or add an optional income rider to generate a paycheck you can never outlive. Sometimes the insurance company will provide an income that increases to help with inflation and the cost of living.
Flexibility
In addition to an income for life, waivers of surrender charges are often included to offer accessibility to your retirement plan in case of emergencies like entering a nursing home or terminal illness. In addition, most companies do not limit annual contributions to an annuity.
Estate Planning
With most fixed-indexed annuities, your beneficiaries are guaranteed to receive your annuity’s Accumulation Value or Minimum Guaranteed Value, whichever is greater.
What Happens to My 401(K) If I Quit My Job?
You can cash it out, leave it with your old employer, or roll it into an IRA. Each option has different tax implications, so choosing the best option for your situation is essential.
If you cash out your 401(k), you’ll have to pay taxes on the amount you withdraw. You may also be subject to a 10% early withdrawal penalty if you’re younger than 59 1/2.
If you decide to leave your 401(k) with your old employer, you’ll still be subject to taxes and penalties if you withdraw the money before retirement. However, leaving your money in a 401(k) can be an excellent way to keep it invested and grow over time. Rolling over your 401(k) into an IRA is another option. With an IRA, you’ll have more control over how your money is invested. And, if you roll over your 401(k) into a Roth IRA, your withdrawals in retirement will be tax-free. Talk to a financial advisor to find out which option is best for you.
RECAP:
- You can keep your 401(k) with your former employer or transfer it to a new employer’s plan.
- You can also convert your 401(k) into an Individual Retirement Account (IRA) or an Annuity via a 401(k) rollover.
- Another choice is to withdraw your 401(k), which may result in a penalty and taxes on the entire amount.
More Annuity Talk
With annuities, can you grow your retirement savings safely? - YES
We help find the best annuities to safely grow your savings, CDs, 401(k), 403(b), and IRA into retirement.
Can you benefit from the stock market's ups and downs? - YES
Safe annuities allow you to earn interest based on a stock market index's performance without risk exposure, and you are locked in every gain made.
Are Guaranteed Fixed-Rate Annuities Really Guaranteed? - YES
Do you know that there are retirement savings accounts that earn a guaranteed interest over time, like a Certificate of Deposit (CD), with even better rates? We can look into a host of Fixed-rate annuities from (A) Rated companies if you favor contractual guarantee.
Do Annuities Really Guarantee Lifetime Income?
Annuities are the only retirement plan that can provide guaranteed income for life, even if the annuity runs out of money. There are many options, and we will help you find one best suited for your time horizon and retirement goals. You can turn your retirement savings into an income stream you can't outlive. A guaranteed lifetime withdrawal benefit would also provide a paycheck for a single or both spouses' lifetimes.
How about Annuities and Inflation?
Your payments have the opportunity to increase each year to protect against inflation.
Life Insurance Insights
No two people are exactly alike, so why would you want someone else's insurance strategy? After all, with different careers, life paths, and goals, you need coverage tailored to your specific situation. We'll simplify the complex while also providing a high level of service.
It happens more often than you think…
After running multiple tests, doctors conclude you have an incurable medical condition that may affect the length of life you have remaining.
A million thoughts race through your head. You’re unsure of what to do or whom to call. Your first priority is your family and who will look after their well-being when you’re gone. Might you be asking yourself:
- How will your spouse stay afloat with all the debt accrued?
- Who will save for your children’s college fund?
- Where will your family be without you?
Or will you be thinking instead of how you will choose to spend whatever time you have left secure in the fact you have a precisely calculated policy to cover your debt and funeral costs?
Recognizing everyone’s situation is unique. There are two types of life insurance policies to choose from:
- 1. Term life policies are set up to cover you for a specific period The most affordable life insurance, choose terms up to 30 years, with or without a medical exam, and at times offered with living benefits riders.
- 2. Permanent life policies cover the insured for the course of their life Choose from Whole, Universal, and Index Universal Life Insurance policies with varying features and at times offered by insurance companies with living benefits riders.
No matter the situation, it is important to know what type of policy best suits your needs, the amount of coverage desired, and most importantly, who the beneficiary will be. I walk you through the various options depending on your budget, needs, age, gender, and medical profile.
Life Insurance is a necessity especially when your loved ones rely on your income. You will leave this world knowing that your family won’t be burdened with financial hardships.
More Retirement Planning Tips
Wait Until Full Retirement Age
Don't make the mistake of taking SSI early. Defer benefits until the full Social Security retirement age or age 70. A reduction in benefits will affect an individual later in life when long-term care is needed. Long Term Care expenses are costly, and there is a 70% chance a person will need this type of care.
Set up a Roth IRA Annuity First
Set up a Roth IRA Annuity first. Income from a Roth IRA Annuity will be tax-free if you follow the IRS guidelines. An individual can contribute up to $7,000 annually, depending on the person's age. Fund this annuity contract first and other annuities after the maximum contributions are met.
Reduce Taxes In Retirement with Non-Qualified Annuities
After the Roth IRA Annuity has been fully funded each year, set up and fund the non-qualified annuity; there are typically little to no contribution limits with a flexible-premium annuity. In addition, non-qualified annuities are funded by already taxed money, and only the interest earned will be taxed once you generate income during retirement. Taxes will only increase in the future. Higher taxes result in less income for the retiree. A non-qualified annuity reduces this risk compared to a traditional IRA or IRA annuity because only the interest is taxed instead of the entire amount.
Buy Life Insurance To Protect Your Family
Buy a life insurance policy. Protect loved ones financially starting today if the retirement plan fails because of early death. Find the highest death benefit possible at the cheapest cost. The easiest way to achieve this is to buy while you are young and healthy!
